Tag Archives: Bought By Many

Insurtech Now Hits Corporate, Specialty

When insurtech sprang to prominence in 2015, most startups focused on personal lines disruption. Our August 2016 infographic showed that 75% of insurtechs were targeting personal lines and that 56% were focusing on distribution. Most corporate and specialty insurers concluded that insurtech presented no threat and only limited opportunity and continued with business as usual.

That was then, and now is now. Insurtech now matters for corporate and specialty insurers.

(Incidentally, we agree with the point Adrian Jones, head of strategy and development at SCOR, makes in this excellent article: it’s a myth that insurtech has been around only since 2015. We do, however, believe that there has been a new thrust since then, harnessing the pace and power of new technologies.)

2015-2017: The first wave of insurtech

It is not surprising that insurtech started as a personal lines disruption play. Entrepreneurs, buoyed by what was happening in fintech and other industries, saw huge opportunities to make insurance more customer-centric based on their own experiences. Entrepreneurs wanted to simplify insurance (e.g. Sherpa), offer more tailored propositions (e.g. Bought By Many) or change the whole insurance paradigm (e.g. Guevara).

But the truth is that insurance has not been disrupted over the last three years, and it’s hard to see that this is about to change. As Adrian illustrates in another article, even the most prominent disruptors in the U.S. (Lemonade, Metromile and Root) are finding the going tough and burning through a lot of capital, whether directly or via  reinsurance.

See also: Digital Playbooks for Insurers (Part 1)  

We argue in our insurtech Impact 25 paper (February 2018, page 7) that many distribution insurtechs are not scratching sufficiently major customer itches to be worth the switching cost for those consumers. As a result, the perceived potential is worrying incumbents far more than their actual performance to date.

2018: The second wave of insurtech

If we were to update our insurtech landscape infographic, supplier insurtechs would feature much more prominently. These companies are developing technology (or, as in the case of German insurtech Kasko, have repurposed consumer propositions) to help incumbent insurers, reinsurers and brokers operate more effectively. Supplier insurtechs have found getting traction in consumer markets tough and are developing technologies or techniques that they can sell to the established insurers.

Many of these companies are targeting corporate and speciality underwriters. This is perhaps not surprising – at least not from the U.K. perspective. U.K. personal lines insurers have been investing in pricing capabilities, efficiency and fraud analytics for years as competition has become cutthroat. They are mostly advanced in many areas.

This is in strong contrast to corporate and specialty classes, where much underwriting is still judgment-based, processes are manual and underwriters and risk managers are resigned to poor data quality. As such, we believe that many of the Impact 25 Members can be valuable for corporate and specialty underwriters in 2018. Some examples are below:

  • Insurdata was set up by ex-RMS executive Jason Futers and helps (re)insurers obtain more accurate building location information. This is helpful for underwriting (e.g. commercial property, reinsurance portfolios), risk management and portfolio reviews.(websiteImpact 25 two-pager)
  • Risk Genius uses AI to read policies and understand coverage. Founder Chris Cheatham noted recently. “[My trip to] London was amazing. It took two days for one very big learning to sink in: Underwriters in Europe are empowered to manuscript with little or no formal approval process.” His business allows corporate insurers to get a better understanding of their exposures.(websitetwo-pager)
  • Flock is an analytics platform currently used to price drone flights dynamically, for example taking into account hyper-local weather conditions and locale of flight. The technology’s ability to process big data quickly could be helpful for commercial IoT propositions, for example. (websitetwo-pager)
  • Cape Analytics and Geospatial Insight generate underwriting or claims insight from aerial imagery. This is useful, for example, in natcat losses when (re)insurers need to assess their exposures quickly. (Cape Analytics: website2-pager; Geospatial Insight: websitetwo-pager)

See also: Have Insurers Lost Track of Purpose?  

What it means for corporate and specialty insurers

Technology is not, of course, a new phenomenon in corporate and speciality insurance. However, the speed of proliferation of new vendors (of both technology solutions and data sources) is arguably unprecedented. It challenges the corporate clock speed of most incumbents and will present opportunities to successful adopters to tilt industry profits in their direction.

But identifying the correct response is challenging for incumbents and, as we argue in our Impact 25 paper, there is no single, correct course of action. Choices that need to be made broadly fit into three categories:

  • Strategy: Should we focus on customer experience/proposition or efficiency?
  • Technology: Do we build or partner or buy? If we partner, how do we create and protect differentiating IP?
  • Execution: Should we innovate within the business or in dedicated teams? What structures and processes do we need?

These questions – among others – need to be answered to ensure an effective corporate response.

Insurtechs: 10 Super Agents, Power Brokers

Insurers should aspire to give their agents and brokers superpowers. Superpowers? Think of the impact of speech-to-speech language translators that free you from having to learn foreign languages. Of GPS car navigators helping you find your way without knowing your way. Or of 3-D printers that enable consumers to produce their own products. Those kind of superpowers. Insurers can deploy technology to empower agents and brokers much more, leading to an even better experience and performance. For instance, by combining and integrating robo-adviser systems with human agents and brokers, insurers can deliver better conversations and higher customer satisfaction, which result in better advice and higher conversion rates. A hybrid model. The best of both world.

Connecting online customers with offline brokers and agents

Digitization changed the way people research and purchase products. More and more comparison sites enable customers to check prices and services with just a few clicks. Consequently, agents and brokers need to adapt. Yesterday’s tactics become less and less effective, in particular in view of ever increasing customer expectations. But complex insurance products still need extensive explanation, and trust in the insurer. This is where the human factor comes into play. In Germany, for instance, 59 percent of all insurances are researched online, but purchased offline (ROPO), according to a survey by Google and Zurich in 2016. For high value and complex insurance and finance products like health, mortgage and pension insurances, the ROPO share accounts for more than 75 percent of all sales.

Best of both worlds

The past decade has taught us that insurers need to manage the feelings side of their relationship with customers much better. But with new technologies primarily being used to digitize processes, insurers are in danger to become even less human.

Humans inject emotion, empathy, passion, creativity, they are able to smile and surprise, and can deviate from the procedure if needed, which algorithmic systems are unlikely to do at this stage. They have the ability to be kind, honest, friendly, generous, giving; someone who makes time for me, listens to me, keeps promises, goes the extra mile. These talents are essential parts of successful customer engagement. We believe that insurers should create the best of both worlds. By leveraging the latest technologies insurers can create smarter agents and empowered brokers.

See also: Insurtech: How to Keep Insurance Relevant  

Agent and broker empowerment

In this DIA Summer Read we included six insurtechs that insurers should team up with to revamp this channel. Each of these insurtechs supports the agent or broker in different stages of the primary process:

1. LifeDrip offers state of the art automated marketing tools to agents and brokers.

2. Predictivebid built building an advanced AI platform for online customer acquisition.

3. Finanzen.de created an online marketplace for leads.

4. Virado puts the insurance broker back in the middle with an on-demand offer for millennials.

5. RiskAPP allows agents and brokers to seamlessly collect data for risk analysis.

6. Figlo facilitates the conversation between brokers/agents and customers.

These six insurtechs have in common that they all give superpowers to agents and brokers. They give access to capabilities that used to be exclusive to large corporations. With the solutions offered by these insurtechs agents and brokers can move to a next level.

Next generation brokers

We also notice a new kind of broker emerging that taps into the needs of consumers and insurance carriers alike, leveraging to the max what digital has to offer. We included four of them in this DIA Summer Read:

7. Knip: the personal digital insurance manager.

8. SPIXII: an insurance chatbot designed to speak to consumers just as a person would.

9. Bought By Many: grouping together people with a special similar insurance need.

10. PolicyGenius: reveals the gaps and overlaps in your policies.

DIA Munich

Expect DIA Munich (15 and 16 November) to pay ample attention to insurtechs that make smart agents and power brokers.

Agent and Broker Empowerment

1. LifeDrip: The future of life insurance agent’s sales software

The world is going mobile but most insurance brokers and agents still use ‘old’ marketing methods to generate leads. It is time for something new and something smarter.

LifeDrip, launched by the Seattle based software company Xeddy, is a turnkey, fully automated mobile marketing system exclusively built for the life insurance agent. It provides monthly, custom branded email newsletters and an exclusive agent website for generating client reviews and feedback.

LifeDrip captures the fastest growing form of lead exposure, including Facebook, Google+, Twitter and LinkedIn. It is done automatically and the contacts and the database are continuously synced. Agents don’t even have to think about it. LifeDrip offers a new way to generate leads at a fraction of the cost. The SEO website is registered with Google and built with responsive code so it is viewable on any mobile device. To maximize Social Media marketing exposure all the required content for Social Media Marketing and Email Newsletters is automatically generated and customized specific to the agent’s sales specialties. The Recommendation Engine generates dozens of powerful and real client recommendations. SplashTriggers notifies instantaneously when a prospect is ready to be contacted for the sale and what to sell them.

Read more: http://bit.ly/2vniEFD
Check demo: http://bit.ly/2irgVOG

2. Predictivebid: the bidding platform of the future for insurance

Predictivebid is a Tel-Aviv based tech company, building the most advanced AI platform for online customer acquisition through Search & Social campaigns based on Life Time Value Measurements. They excel in lead generation campaigns, lead quality analysis and lead potential scoring, thereby optimizing the lead process and helping companies lower their acquisition cost by providing higher quality leads with better life-time-value metrics. Predictivebid bridges the gap between online and offline, helping insurers capture consumers online and then directing them to book a meeting with their nearest and most relevant agents. The AI platform connects and tracks potential customers to the right agent nearest to them, based on their location and needs. A costumer can schedule a meeting with an agent, chat with an agent or even send his details so the agent can call him back.

Read more: http://bit.ly/2vdced1
Check demo: http://bit.ly/2wmpXC7

3. Finanzen.de: the marketplace for leads

Finanzen.de, located in Berlin, Paris, Zurich and Bristol, connects lead generators such as online price comparison sites with lead buyers such as independent financial advisers and insurance companies. More than 800,000 leads are annually traded via its industry leading technology platform, using real time auctions and real time lead delivery. The company also acts as an online broker for P&C insurance products. Thanks to its scalable business model, finanzen.de is ideally positioned to benefit from the digital shift occurring in the European insurance and banking domain and to capture the significant market potential ahead.

Founded in 2004, Finanzen.de is one of the oldest and at the same time one of the most successful InsurTech companies. Finanzen.de generates about one million online leads per year for more than 20,000 insurance experts and financial consultants. Finanzen.de informs consumers about insurance and finance topics and offers interested customers free access to the best possible advice. In the search for suitable offers, visitors can perform neutral tariff comparisons. If they find a suitable offer they can close a contract directly online or receive advice from audited and evaluated experts.

Read more: http://bit.ly/2nZAR9C
Check demo: http://bit.ly/2xrmr6j

4. Virado: One app. 250 niche product insurances for Millennials

German tech startup Virado is successfully creating new sources of income for insurance brokers. By offering 250 insurance products, mainly for niche policies on one platform. Targetting German Millennials. For example, insurance for an apartment share, DJ-equipment, or a travel backpack. These kind of products were not available for the insurance broker due to high connection and transaction costs of the insurer. The Virado all in one app for smartphones and tablet is based on Virado technology. The on-demand platform offers insurance brokers structured access to all insurances. Easy. Fast. Free.

Virado puts the insurance broker back in the middle. Millennials do not use a traditional insurance broker. They go online to find an insurance solution to fit their lifestyle. The on-demand platform Virado puts the insurance broker back in the middle by giving him the opportunity to not only protect but also to create new sources of income by serving the Millennials with insurance products they need. ‘On the spot’ insurance products will significantly increase the customer’s loyalty and customer lifetime. The tech startup offers also digital business expertise and the app is suitable for the insurance brokers homepage and its own social media channels.
Virado is completely free of charge and user-friendly. All the insurance broker needs to do is download the app and register.

Read more: http://bit.ly/2w23mbh
Check demo: http://bit.ly/2wmAGg5

5. RiskAPP: Risk assessment by agents and brokers

RiskAPP is a new Risk Assessment tool created to assist insurers globally. RiskAPP is a unique platform for structured data collection and integrated risk assessment. RiskAPP helps insurers to use captured data from their prospects and clients to sell and underwrite the risks wisely and profitably. The RiskAPP is a complete Risk Assessment tool for the insurer that wants to win his challenges.

RiskAPP delivers the most complete risk assessment possible. Through the platform the insurer can offer the most remunerative coverage program giving safety and peace of mind to insurance clients and the insurance carriers. The sales process is now smooth and seamless.

When the broker has the first meeting with a prospect, the RiskAPP data collection helps the broker to engage the client. The process follows with the technical inspection where the loss preventionist gathers further technical data that clearly describes the company. RiskAPP, thanks to its proprietary algorithm, processes the data collected and elaborates a detailed report included with automated loss protection recommendations. The insurer now has access to the most complete risk profile of the insured. RiskAPP enables analytics, portfolio management and helps in increasing the efficiency of risk selection.

Read more: http://bit.ly/2wDxoon
Check demo: http://bit.ly/2vnQtX4

6. Figlo: facilitating the conversation with customers

AEGON Turkey uses the Figlo platform to facilitate the conversation between brokers/agents and customers. A tablet app guides the complete conversation and gives a quick and tailored overview of the customer’s financial situation to select suitable products based on the client’s risk profile, to cover possible shortfalls. Uğur Tozşekerli, CEO AEGON Turkey: “Customer interaction and involvement as well as the possibilities for illustration and demonstration of the product benefits dramatically increased. From a customer point of view, using the app leads to better and more understandable advice, focus on the real customer needs and on top of that faster service. Straight through processing results in more efficiency and speed of delivery. Apart from a significant improvement of conversion rates the deal size increased between 10 to 45%, depending on the product category. At the same time the operational costs decreased by 18% due to decrease in rework and paperwork. The ROI was already positive in the first year of deployment.”

Quote is from our new book ‘Reinventing Customer Engagement’

Next Generation Brokers

7. Knip: The personal digital insurance manager

Knip is a ‘mobile-first’ digital insurance broker with a simple and transparent solution to insurance; bundling all the customers’ insurance products into one app. Even if these products are from different insurers. An easy-to-understand overview shows existing insurance policies, tariffs and services. One click opens an entire insurance policy. So the important information is always at hand. After an automatic analysis, new customers receive individual recommendations based on their existing insurance portfolio. Upon request, the Knip insurance experts offer professional consulting, analyze tariffs and services and detect individual savings and optimization potential. As the consultants receive a fixed salary and no commission whatsoever, they can provide independent and honest insurance advice. The app is designed to automatically detect individual’s insurance gaps and recommend essential insurance. Knip allows users to change their tariffs, close new insurance contracts and cancel old policies with a simple click.

Read more: http://bit.ly/2wxi65i
Check demo: http://bit.ly/2vXA7YK

See also: What Incumbents Can Teach Insurtechs  

8. SPIXII: Making insurance simple, accessible and personal for everyone

London based startup SPIXII is on a mission to make insurance simple, accessible and personal. It starts by redesigning the way people buy insurance. SPIXII, named after a family of Brazilian parrots that spell out the co-founder’s names, has almost entirely done away with the human component of selling insurance. It is an automated insurance agent, a chatbot accessible via messaging platforms or via a native mobile app. Its app creates a WhatsApp-like chat on a smartphone where a robot will ask simple questions and figure out what the user needs. Built on principles of neuro-economics and the integration of user data with contextual data from multiple sources, SPIXII is an insurance chatbot designed to speak to consumers just as a person would.

Read more: http://bit.ly/2xrFfT9
Check demo: http://bit.ly/2sxsubF

9. Bought By Many: grouping together people with a special similar insurance need

Bought By Many uses a combination of search engine optimization and social media to group together people who have similar insurance needs –such as diabetic travelers, pug owners or homeowners in flood risks areas. They present that group’s requirement to the insurance industry and negotiate on behalf of the group to bring them a better deal than they can get on their own. A better deal might be better pricing, it might be more tailored benefits, or it might be both. Once they bring the offer back to the group, individuals buy directly from the insurer on the better terms that Bought By Many negotiated for them. Creating a win-win for everyone. Insurers only write the risks that they want and members of Bought By Many get a better deal.

The company finds niche groups by looking at Google search data to see which niches have high volumes of search queries. There is also a data entry box on its website letting people submit their own policy ideas. They then validate those segments through social media and engaging with niche blogs, Facebook groups and other stakeholders. The site makes it easy for users to use social media and invite friends to join via Facebook, Linkedin, Twitter and the like. Having established the market, the company works out the group’s specific requirements and then approaches the insurance companies to negotiate a deal on a policy.

Bought By Many suggests to insurers to split the usual broker fee in three parts: one third for the Bought By Many members to get a better benefit, one third for Bought By Many and one third for the insurance company, because Bought By Many want you to want to do this business.

Read more: http://bit.ly/2wmz8CB
Check DIA keynote CEO Steven Mendel: http://bit.ly/2v4hvrz

10. PolicyGenius: revealing the gaps and overlaps in policies

PolicyGenius for instance addresses the uncertainty of consumers with regard to gaps and overlaps in the various policies they have purchased over time. PolicyGenius offers a highly tailored insurance check-up platform, where consumers can discover their coverage gaps and review solutions for their exact needs. PolicyGenius’ online store includes solutions from life and long-term disability to pet insurance. Quoting engines offer side-by-side comparisons of tailored policies. PolicyGenius is backed by AXA Strategic Ventures and AEGON’s Transamerica Ventures. What would happen if AXA and AEGON would open up the PolicyGenius platform to all its brokers and agents in all countries she has a presence?

Read more in our new book ‘Reinventing Customer Engagement’.

Insurtech: How to Keep Insurance Relevant

In the age of the fourth industrial revolution, risks are changing. The advent of technology has made digital assets more valuable than physical ones.

In this scenario, the insurance sector has been increasingly left to deal with technological change and disruption and is having to reconsider the way it defines itself. Having had the opportunity to discuss this transformation in more than 15 countries, I have seen that insurtech is helping to redefine the way the insurance industry is perceived.

Insurance is about providing protection for people in life and in employment. It is about providing a contract where someone promises to indemnify another against loss or damage from an uncertain event, as long as a premium is paid to obtain this coverage – the concept has been around since 1347.

It’s unthinkable for an insurer today not to ask how to evolve its business architecture by thinking which modules within the value chain should be transformed or reinvented via technology and data usage. I believe all the players in the insurance arena will be insurtech – that is, organizations where technology will prevail as the key enabler for the achievement of the strategic goals.

See also: Core Systems and Insurtech (Part 1)  

Insurtech startups have received more than $18 billion in funding to date, according to Venture Scanner data. Fantastic teams and interesting new insurance cases have been grabbing the attention of analysts.

Full-stack insurtech startups are generating a lot of excitement in the investor community and attracting relevant funds, and some have achieved stellar valuations, with Oscar, Lemonade, Sonnet, Alan, Element, Zhong An some of the most fascinating players. It looks like the aim of disrupting the status quo, combined with a skepticism about the incumbents’ ability to innovate, is focusing the attention on players to create new insurance products.

A business model adopted by more and more players is the MGA/MGU approach (Managing General Agents/Managing General Underwriter), a way to satisfy investor appetite for players covering a large part of the activities in the insurance value chain and partnering only with an incumbent for receiving underwriting capacity. Trov, Slice, so-sure, Insure the Box, Root, Bought By Many and Prima are some examples of this approach.

I am positive about the ability of the incumbents to innovate, and about the potential for incumbents and insurtech startups to collaborate. This view is based, for example, on the impressive international success of players such as Guidewire and Octo Telematics. I believe service providers for the insurance sector will be more successful in scaling at an international level than the other models described above. This kind of collaboration is leveraging on the incumbents’ technical knowledge and their customers’ trust, which has frequently been underestimated by insurtech enthusiasts. The most relevant opportunity is the collaboration between incumbents and specialized tech players capable of enabling the incumbents’ innovation in the different steps of the business model.

Denim for the awareness, Digital Fineprint for the choice, Neosurance for the purchase, MotionCloud for the claims, Pypestream for the policy management – these are a few players innovating on each step of the customer journey, based on my map to classify the insurtech initiatives.

For insurtech startups to outperform traditional insurance companies, they need to have their business models concentrated in what I call the four axes (4 Ps): productivity, profitability, proximity and persistency.

An excellent example is Discovery Holding, with its Vitality wellbeing program. This has been replicated in different business lines and countries with different business models – they are carriers in some countries, operate joint ventures with local insurers in other regions and are a service provider in other nations. They are using state-of-the-art technologies such as wearables and telematics to create a model based on value creation outperforming on all the four Ps, enabling them to share value with their customers through incentives and discounts.

See also: What’s Your Game Plan for Insurtech?  

Insurtech adoption will make the insurance sector stronger and in that way more able to achieve its strategic goal: to protect the way people’s lives and organizations work.

Asia Will Be Focus of Insurtech in 2017

Asia will be the key pillar in the coming revolution of insurance and in all likelihood will become the hottest market for insurance technology (insurtech) globally. It’s no longer just a pipe dream, as this time all the stars are aligning. Take the sheer population size and rapidly emerging tech-savvy middle class, together with low effectiveness of traditional insurance distribution. Combine that with a destabilizing wave of political populism, making its rounds across much of the developed world, and you’ve got most of the ingredients for a region that will take on a leading global role for insurtech.

So what, if anything, is missing to really ignite insurtech in Asia? It turns out that while the region is ripe for insurtech, the actual quantity and quality of startups in Asia is nowhere near that of other regions… at least not yet.

Share of investments in insurance startups can be used as a good proxy to the overall level of insurtech activity around the world. According to the figures, the U.S. takes 63%, with Germany (6%), U.K. (5%) and France (3%). China is at 4% – which doesn’t account for Zhong An’s massive investment in 2015 — and India at 5% (Source: CB Insights).

See also: The Future of Insurance Is Insurtech  

So the logical question is, why aren’t there more startups in Asia, considering the substantial opportunity and funding that exists in the region? Is it due to a shortage of experienced entrepreneurs, difficulty of starting a business, lack of access to investment or something else? The answer is that it’s likely a combination of a few factors, including a weaker early-stage entrepreneurial ecosystem, which doesn’t yet effectively support startups, and a cultural aspect of lesser tolerance for failure. Both of these are changing fast, though, and entrepreneurs across Asia are starting to identify and test innovative insurtech solutions.

The following are just a few recent notable insurtech startup examples across Asia that have already reached beyond Series A funding: Zhong An (an $8 billion Chinese insurtech startup), Connexions Asia (Singaporean flexible employee benefits platform with a U.S.$100 million valuation), and two large insurance aggregators out of India– Policybazaar and Cover Fox.

So why am I convinced that Asia insurtech startups will not end up dominating their regional home turf ?

Probability and “Survival of the Fittest”

The lack of critical mass of startups in the region means that they will not enjoy the same quality filters and network effects of the larger entrepreneurial ecosystems of the U.S., Europe and to a somewhat lesser degree China.

“Surviving” U.S. and European startups have to fight their way across a lot more competition to reach scale in their home markets. Hence, where a weaker startup in Asia could get repeated life support simply because there aren’t that many others to invest in, natural selection weeds out the weaker models in EU/U.S. much quicker in favor of more robust ones. Stronger startups then get to attract the best talent from the entrepreneurial ecosystem, including talented entrepreneurs whose models didn’t work as well, further reinforcing successful EU/U.S. startups.

Home Market Advantage

Success in a large home market like the U.K., Germany or a few U.S. states gives a substantial boost to any startup. It provides both credibility and cash flow to allow a much more aggressive expansion into other regions. This also gives a startup flexibility to develop the necessary adjustments to the business model to adapt it for Asia.

The U.S. and EU have a deep domain level of insurance expertise, which gives EU/U.S. startups from those regions a further edge to tap advisory expertise locally, because most of the largest global insurers are based in these two regions.

Lastly, considering that most startups adopt a collaborative approach with insurance companies, having a relationship that originates close to the top decision maker at headquarters gives an added advantage to EU/U.S. startups when they are looking at expanding to new regions. I’ve personally experienced examples of relationships developed in Europe that later carried over in creating a pre-warmed partnership with the insurer’s operations in Asia.

Regulatory Complexity

Asia is made up of a large number of countries, where each has its own insurance regulator, who possess views on how things should be run. This means an additional potential growth hurdle for Asian startups.

For example, a startup out of Singapore will need to figure out how to navigate the neighboring Asian country regulatory regimes pretty early in its growth cycle. Thailand, Malaysia, Indonesia and Vietnam markets all have diverse regulatory requirements. This lands the Singaporean startup at a disadvantage vs. a more mature startup out of EU/U.S. – which not only has experience dealing with regulators in its home market but also possesses a proven track record and a larger resource pool that it can use to overcome any regulatory issues.

Meet Future Leaders of Asia InsurTech

Here are  35 insurance startups from across the U.S., Europe and China that have a real shot at collaboratively shaping the future of Asia’s insurance . Granted that not all of these startups will successfully adapt their models for Asia, a few would and will go on to successfully dominate Asia’s insurtech landscape in the foreseeable future.

Credit: George Kesselman

Credit: George Kesselman

The future of insurance in Asia is coming fast, and it’s looking pretty exciting!

See also: Insurtech Has Found Right Question to Ask  

Below are links/brief description of each of these 35 ventures.

U.K.

  • Guevara – People-to-people car insurance
  • Bought by Many – Insurance made social
  • Cuvva – Hourly car insurance on-demand
  • SPIXII– AI insurance agent
  • Gaggel – A better alternative to mobile phone insurance.
  • ClientDesk – Digitizing the insurance industry
  • Insly – Insurance broker software

Germany

  • SimpleSurance – World’s leading e-commerce provider for product insurances
  • Friendsurance – The future of insurance (P2P)
  • Getsafe – One-stop digital solution for all your insurance matters
  • Finanz-chef24 – Germany’s largest digital insurance for entrepreneurs and self-employed
  • Money-Meets – Save money and improve finances
  • Clark – Insurance as easy as never before
  • MassUP – White-labeled platform for online insurance sales
  • FinanceFox – Your insurance hero

USA

  • Metromile – Pay-per-mile insurance (usage-based auto insurance)
  • Oscar – Smart, simple health insurance.
  • Zenefits – Online HR Software | Payroll | Benefits – All-In-One (EB distribution)
  • Policy Genius – Insurance advice, quoting and shopping made easy
  • Embroker – Business insurance in the digital age
  • Slice – On-demand insurance for the on-demand economy.
  • Trov – On-Demand insurance for your things
  • Cover Hound – Compare car insurance quotes from top carriers
  • Insureon – Small-business insurance
  • Bunker – The marketplace for contract-related insurance
  • Lemonade – Peer-to-peer renters and homeowners insurance
  • Cyence – Comprehensive platform for the economic modeling of cyber risk

China

InsurTech: Golden Opportunity to Innovate

The insurance industry has remained much the same for more than 100 years, but over the past decade it has seen a number of exciting innovations and new business models.

As part of PwC’s Future of Insurance initiative, we’ve interviewed numerous industry executives and have identified six key business opportunities (illustrated below) that incumbents need to take advantage of as they try to meet customer needs while improving core insurance functions.

See Also: Key to understanding InsurTech

Because FinTech offers substantial promise to take advantage of emerging opportunities, funding for start-ups is surging. Increased funding activity not only demonstrates venture capitalist investors’ interest but also indicates how incumbents may leverage FinTech to address their specific business challenges.

The insurance-specific branch of FinTech, InsurTech, is emerging as a game-changing opportunity for insurers to innovate, improve the relevance of their offerings and grow. InsurTech, has seen funding in line with FinTech investment overall, and we expect investments to increase as new players and investors enter the space.

1 2 3 4

As Figures 2 and 3 show, activity around early-stage InsurTech companies has generated considerable buzz. Moreover, experienced insurance executives have joined start-ups, including Insureon and Lemonade, to help them develop new types of products and services, like small business aggregators and peer-to-peer insurance models. All of this indicates that investors and the industry are eager to get on board with early stage start-ups to meet the six areas of opportunity we illustrate above and describe in detail as follows:

1) Meet changing customer needs with new offerings – Customer now expect personalized insurance solutions. One size simply does not fit all any more. Usage-based models are partially addressing these expectations, but the sharing economy also is challenging existing, more traditional insurance products. New players are able work from a clean slate and leverage a variety of available resources to fill market gaps. For example:

  • Metromile, a start-up, has developed a customer- (rather than risk-) centric value proposition for occasional drivers. It offers a low base rate and then charges a few cents per mile driven. Metromile also offers an app that provides personalized driving, navigation and diagnostic tips, and can even remind drivers where they parked. Furthermore, the company has entered into a partnership with Uber that allows drivers to switch from personal to Uber insurance.
  • USAA has invested $24 million in Automatic Labs, a telematics platform that claims it will “connect your car to your life” and provides a full suite of integrated apps (including wearables).
  • In the life sector, Sureify has developed a platform that allows insurers to underwrite life insurance based on lifestyle data inputs they obtain from wearables.
  • In the peer-to-peer space, Lemonade claims to be the world’s first peer-to-peer carrier, but other companies like Guevara and InsPeer have been exploring variations of the same model. Bought by Many, a start-up that uses social platforms in its go-to-market strategy, helps individuals join or even create affinity groups, as well as find insurance solutions for their specific needs across different product lines. Of note, leading Chinese insurer Ping An has partnered with Bought by Many to create personalized travel insurance by leveraging social media data.

Some large insurers have decided to develop start-ups in-house. For example:

  • MassMutual is using internal resources to build Haven, a new, stand-alone, direct-to-consumer business.

2) Enhance interaction and build trusted relationships – Established carriers have to manage increasing customer expectations and provide seamless service despite their large and complex organizations. In contrast, new market entrants are not burdened with large, entrenched bureaucracies and typically can more easily provide a seamless customer experience – often using not just new technology but new service concepts.

For example, self-directed robo-advisers are convenient, 24/7 advisers that provide ready access to information that can empower consumer decisions about financial planning and investment management. And investors have taken notice:

  • Northwestern Mutual acquired Learnvest, a leading robo-adviser with an estimated value of more than $250 million.
  • Other robo-advisers, such as FutureAdvisor, have been part of important deals, while others (including Betterment, Personal Capital and Wealthfront) have raised funds above $100 million.

Moreover, disintermediation and the emergence of new online channels is occurring in all lines of business:

  • The Chicago-based start-up Insureon has created an aggregator that specializes in micro and small businesses. It taps into existing profit pools that personal and commercial carriers are trying to reach.
  • To become a B2C player in the digital small business market, ACE Group has recently taken a 24% ($57.5 million) stake in Coverhound, which enables customers to directly compare coverage options and pricing from various carriers.

3) Augment existing capabilities and reach with strategic relationships – The insurance industry historically has included intermediaries, service providers and reinsurers. In most cases, the carrier has led the business relationship because of its retail market position and scale. However, companies increasingly are peers. Accordingly, joint ventures and partnerships are a good way to augment existing capabilities and establish symbiotic relationships. For example:

  • BIMA Mobile has partnered with mobile telecom companies to provide life insurance solutions to uninsured segments in less developed countries. It offers simple life, personal accident and hospitalization insurance products on a pay-as-you-go (PAYG) basis for a set time period (usually just a few months). Policyholders can obtain a pre-paid card and activate and manage their policy from a mobile phone.
  • AXA has acquired an 8% stake in Africa Internet Group for EUR75 million, opening opportunities for the company in unpenetrated markets.

New B2B2C entrants also are helping forge mutually beneficial relationships:

  • Zenefits was one of the first to create channels to connect insurers, brokers, employers and employees.
  • Flock, which features broker managed benefits where plans can be designed to cover a range of options from enrollment to life events, offers what it says are “absolutely free” HR and benefits solutions.

4) Leverage existing data and analytics to generate risk insights – Established insurers traditionally have had the advantage over prospective newcomers of being able to leverage many years of detailed risk data. However, data – and new types of it – now can be captured in real-time and is available from external sources. As a result, there are new market entrants that have the ability to generate meaningful risk insights in very specific areas.

  • Several Internet of Things (IoT) companies, including Mnubo, provide analytics that generate insights from sensor-based data and additional external data sources like telematics and real-time weather observation. The promise of the better risk assessment and management resulting from this model is likely to appeal to personal and commercial carriers.
  • Facilitating this real-time data collection are drone start-ups, including Airphrame and Airware. Drones provide the ability to analyze risk with embedded sensors and image analytics. They also can operate in remote areas where it has traditionally been difficult for humans to tread, thereby saving time and increasing efficiency. In fact, American Family’s venture capital arm is investing in drone technology to explore new approaches to access and capture risk data.
  • In the life space, P4 Medicine (Predictive Preventive, Personalized and Participatory) offers insurers better insights that they can apply to life and disability underwriting. Lumiata is offering the potential for better predictive health capabilities, while Neurosky is developing next-generation wearable sensors that can detect ECGs, stress levels and even brain waves.

5) Use new approaches to underwriting risk and predicting loss – Protection-based models are shifting to more sophisticated preventive models that facilitate loss mitigation in all insurance segments. Sensors and related data analytics can identify unsafe driving, industrial equipment failure, impending health problems and more. More deterministic models, like the ones that now exist for crop insurance, are starting to emerge, and new entrants are offering both risk prevention (not just loss protection) and a more service-oriented delivery model. For example:

  • The South Africa-based company Discovery has a partnership with Human Longevity. They are teaming to offer whole Exome, whole genome and cancer genome sequencing, to clients in South Africa and the UK. Gene sequencing can identify risks before they manifest themselves as problems, but also raises ethical questions. It has the potential to completely disrupt life underwriting and places certain responsibility on the company to help customers manage genetic risks (while being careful about actually mandating lifestyle choices). But, on the whole, managing genetic risks in advance can benefit both the end-consumer and the insurer because, if they work together, they can better manage or even avoid long-term health problems and associated expenses.
  • On the automotive side, Nauto, a San Francisco- based company, offers a system that provides visual context and telematics with actionable information about driving behavior, including distracted driving. The company claims that its system can help insurers design new pricing strategies and pinpoint areas of premium leakage that they otherwise may not notice.

See Also: InsurTech Trends to Watch For in 2016

6) Enable the business with sophisticated operational capabilities – Effective core systems enable insurers to operate at a large scale. Because of cost, establishing these systems has traditionally been a barrier to market entry. However, access to cloud-based core solutions has facilitated scalability and flexibility. Developments like this, combined with new developments like robotics and automation, have provided new market entrants compelling differentiators.

As just one example, underwriting automation is now available in life and commercial lines (notably for small and medium businesses). Some carriers have adopted simplified processes and “Jet” underwriting, in which they leverage external data sources to expedite approval. This has resulted from the availability of risk insights that support new underwriting approaches. Several companies are offering to optimize and augment processes via improved collaboration, artificial intelligence and more. For instance:

  • OutsideIQ offers artificial intelligence solutions via an as-a-service underwriting and claims workbench that uses big data to address complex risk-based problems.
  • In addition, automating claims can improve efficiency and also effectively assess losses. Tyche offers a solution that uses analytics to help clients estimate the value of legal claims.

Implications: Think like a disruptor, act like a startup

In a time when societal changes, technological developments and empowered customers are changing the nature of the insurance business, established insurers need to determine how InsurTech fits in their strategies. The table shows the various approaches insurers are taking.

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More specifically, insurers are:

  • Exploring and discovering – Savvy incumbents are actively monitoring new trends and innovations. Some of them are even establishing a presence in innovation hotspots (e.g., Silicon Valley) where they can learn about the latest developments directly and in real time.

Action Item: Plan an InsurTech immersion session for senior management. This should be an effective eye opener and facilitate sharing of relevant insights on desired InsurTech solutions. Subsequently, FinTech analyst platforms can keep management up to date on the latest developments and market entrants.

  • Partnering to develop solutions – Exploration should lead to the development of potential use cases that address specific business challenges. Incumbents can partner with start-ups to build pilots to test in the market.

Action Item: Select a few key business challenges, identify possible solutions and find potential partners. A design environment (“sandbox”) will help boost creativity and also provide tools and resources for designing and fast prototyping potential solutions. This approach also can help establish the baseline and approach to building future InsurTech solutions.

  • Contributing to InsurTech’s growth and development – Venture capital and incubator programs play an important role strategically directing key innovation efforts. Established insurers can play an active role by clearly identifying areas of need and opportunity and encouraging/working with start-ups to develop appropriate solutions.

Action Item: Define a strategy to direct startups’ focus on specific problems, especially those that otherwise might not be addressed in the short term. Incumbents should consider start-up programs such as incubators, mechanisms to fund companies and strategic acquisitions. (N.B.: It is vitally important to protect intellectual capital when imparting industry knowledge to start-ups.)

  • Developing new products and services – Being active in InsurTech can help incumbents discover emerging coverage needs and risks that require new insurance products and services. Accordingly, they can refine – and even redefine – product portfolio strategy. This will result in the design of new risk models tailored to underserved and emerging markets.

Action Item: Take a close look at emerging technologies and social trends that could be business opportunities to define product strategy, determine required capabilities and develop a plan to build a portfolio and seize market opportunities. FinTech has become a buzzword, but whichever way the FinTech/InsurTech market itself goes, the reality underpinning it is not a passing fad. Insurers that are actively involved with InsurTech in any of the ways we describe above stand to gain, whichever way the market moves. They can use their capital and understanding of customers and the market to both inspire and exploit innovative technologies and correspondingly grow their business.